Thursday, February 09, 2006

PhD salaries

Forbes magazine has an article about the lack of mathematically trained US workers. Most of the article is about outsourcing, but the issu of starting salaries came up:

A person fresh from graduate school with a Ph.D. in operations research can make $90,000 at SAS Institute--far less than the $150,000-plus salaries top MBAs can command. "Yes, fine, we need to pay more," Steve Odland, CEO of Office Depot admitted.

Well, kinda... First, a fresh MBA rarely makes $150,000: the average Tepper MBA graduate is closer to $90,000. Second, the lifestyle of those who make the high amounts in terms of stress, travel, and so on is pretty rotten, at least by my standards. Finally, there are lots of fresh Ph.D.s in OR making more than $90,000, often teaching those same MBAs!

Not to say that Ph.D.s should make lots of money (I am one of them myself!), but that doesn't seem the most dire aspect: it is really the lack of supply of interesting jobs that allow the true use of an OR Ph.D.


Anonymous Anonymous said...

Starting salaries for academics in OR vary all over the map, depending on what kind of job the new PhD has (an academic postdoc, a visiting faculty position, or a tenure-track faculty position) as well as the kind of department (mathematics, industrial engineering, or business.)

Another important factor is the difference between nine month and twelve month salaries. Many academics have the opportunity to increase their income by a third by teaching or working on research projects during the summer.

At the high end, some business school faculty are starting in tenure track positions at over $100,000 for nine months. On the other hand, there are lots of people in OR (e.g in optimization) starting as postdocs or visiting assistant professors in mathematics departments for as little as $40,000 for 12 months.

An important factor is the cost of living in different parts of the country. A young faculty member earning $60,000 per year in a small college town where a house costs less than $100,000 is arguably better off than his classmate who goes to work in the San Francisco
bay area (where houses start at $500,000) at a salary of $120,000.

One place where the wide range of salaries becomes painfully obvious is at the INFORMS national meetings. These are typically held in major cities at fairly expensive hotels. Most of the business school faculty and corporate crowd stay at the conference hotels, while many other academics (particularly the foreigners), students, and the unemployed folks end up staying at the closest inexpensive hotel.

Over the last 20 years, starting with the old ORSA/TIMS joint meetings, I've seen the differences in salaries grow. In the long run, these class divisions could be very bad for the future of INFORMS.

February 13, 2006 10:15 AM  
Blogger Michael Trick said...

INFORMS is doing a salary survey, so we should be getting hard data on this. You can fill out the survey here.

February 20, 2006 3:49 AM  

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